Bringing power exchange technology to the world? NIO said it will share the swap technology with competitors

According to the Financial Times, China's new energy vehicle giant NIO is ready to share its electric vehicle swapping platform technology with other car companies in the competition, and plans to build 1,000 replacement stations overseas by 2025.

Zhang Hui, vice president of WEIO Europe, said in an interview that the company is willing to share its power exchange platform technology with other automakers and is negotiating with domestic and foreign automakers on this matter. Asked whether the shared swap technology refers to licensing or other types of commercial agreements, NIO declined to provide more details.

"We want to be a player in the (European) high-end market by 2025." Zhang Hui said. Weilai believes that the power exchange model can win the support of European consumers, and the scarcity of charging piles and the long charging time of two factors hinder the growth of electric vehicles in the European region. The company hopes to expand the use of the technology by selling the power exchange system, so as to resolve consumers' concerns about the shortage of charging piles.

NIO has built 868 substations in China and says its customers have replaced batteries 7.6 million times. In January, NIO opened its first substation in Norway and plans to build 20 substations in the country. In the future, the company aims to build 1,000 substations in Europe and the United States by 2025, and to increase the global substation network to 5,000 by the middle of this century.

NIO said that when the ES8 SUV model was launched in Norway, almost all customers chose to rent the battery separately, so that they could use the replacement station. The one-month battery rental fee includes two free battery replacements, with consumers having a choice of a 100 kWh battery or a cheaper 75 kWh battery, which will be available later this year.

The so-called "power exchange" is that when the battery of the new energy vehicle is insufficient, the battery that has been fully charged on the recent replacement station is replaced, and the concept is similar to the charging method of the old mobile phone battery. The average time required to change the power is less than 5 minutes, while the charging mode takes more than one hour under the condition of fast charging and 8-10 hours for slow charging.

Compared with the traditional charging mode, the advantage of the power exchange mode is to shorten the energy replenishment time, extend the battery life, improve safety, have a small impact on the power grid, share the pressure of insufficient charging piles, and directly reduce the cost of car purchase for users.

The fly in the ointment is that the construction cost of the power exchange network is much higher than that of the charging network. The Swedish Transport Authority published a study last year on power swaps, citing data from Weilai, which showed that the cost of building a substation in China was $772,000, including battery and site rental, compared to $309,000 to build a battery charging station.

Weilai said it is currently seeking to reduce the construction cost of the substation. Sharing its power exchange platform with other automakers can improve the utilization of the substation, thereby increasing cost-effectiveness.

Nio's power station operation is live

In addition to Weilai, there are not many enterprises engaged in power exchange services in China, and most of them are for service vehicles such as taxis, and there are only a few power exchange services for private cars. The main reason is that the power exchange standard has not been unified, the cost investment is too high, and it is difficult to make a profit in the short term.

Global electric vehicle pioneer Tesla claimed in March last year that the electric vehicle swap model is "problematic and not suitable for large-scale promotion.". Tesla tried a power swap strategy in the U.S. years ago, but quickly abandoned the plan. GM, Volkswagen, Renault and other well-known car companies have also expressed doubts about the power exchange model.

According to reports, one of NIO's potential customers may be Geely's Lotus Technology, which has invested in the company through its venture capital division. Meanwhile, Geely plans to build 5,000 everging stations around the world by 2025, but has not said whether it will create its own platform.

In addition, later this year, NIO will enter Sweden, the Netherlands and Germany. Among them, the model that WEILAI plans to launch in Germany will be the ET7 sedan, which directly competes with the electric version of the BMW 7 Series that also adopts power exchange technology.

The industry generally believes that home charging piles, fast charging piles, and substations will become the three main ways of replenishing electric vehicles in the future. According to the analysis of CICC's research report, it is expected that the number of substations in the mainland will reach 22,000-26,000 in 2025, and the market prospect is broad.

Contrary to the negative attitude of foreign car companies, the Chinese government is vigorously promoting the large-scale application of electric vehicle power exchange mode as an expansion of electric vehicle power replenishment methods.

In 2020, the power exchange model was included in the category of "new infrastructure" and was written into the "Government Work Report" of the two sessions for the first time. In the construction of new energy infrastructure, the "construction of charging piles" has been expanded to "increase the number of charging piles, power stations and other facilities". By 2021, the government work report once again mentioned the need to increase facilities such as substations.

In May 2021, the world's first national standard for power exchange technology, "Safety Requirements for Electric Vehicles", was approved and issued by the State Administration for Market Regulation and the Standardization Administration of the People's Republic of China, which specified the safety requirements, test methods and inspection regulations for electric vehicles using replaceable batteries, and began to be implemented in November 2021.

In October 2021, the Ministry of Industry and Information Technology launched the pilot work on the application of the power exchange mode of new energy vehicles, and a total of 11 cities were included in the scope of the pilot. The goal is to produce 100,000 interchangeable electric vehicles by 2023 and build a total of more than 1,000 substations in the pilot city.

Since the beginning of this year, the Ministry of Industry and Information Technology has issued the "Key Points for Automobile Standardization Work in 2022", requiring the promotion of standards for pure electric vehicles such as on-board power exchange systems, power exchange general platforms, and power exchange battery packs. Automakers NIO and Geely, battery maker Aodong New Energy and state-owned company Sinopec jointly said they plan to open a total of 24,000 substations across the country by 2025, compared with about 1,400 at present.

According to Reuters, if the Chinese market is successful in promoting the power exchange model on a large scale, this shift may affect the business models of global auto giants such as Tesla, Volkswagen and General Motors. These brands of electric vehicles use their own patented batteries, and Tesla even uses only the company's charging network.

Battery swap technology has always been one of the core competitiveness of NIO's automotive products, and sharing the swap technology is equivalent to Tesla allowing other brands to use its supercharger network. In addition to the purpose of reducing the cost of power exchange, increasing market share, and accelerating the global layout, Weilai's move is to seize more discourse power in the power exchange industry that is about to usher in the outbreak.